Chancellor Gordon Brown has ruled out a tax-cutting bonanza for voters ahead of an expected general election in May.

In an interview with The Times newspaper, Mr Brown said he was planning "targeted tax reductions" rather than "across the board" cuts.

Historically, Britain has failed to learn about what pre-election budgets should be

Gordon Brown

The chancellor's comments appeared designed to dampen speculation that he was planning to use an estimated £10 billion treasury surplus to cut the basic rate of income tax.

Indicating that an election is imminent, Mr Brown said the March budget would contain a five year "economic manifesto".

Any tax changes would be geared towards helping pensioners to keep more of their savings and boosting payments to families with young children.

Mr Brown suggested the budget would not be a giveaway aimed at securing votes for Labour in the general election.

Learning from history

"Historically, Britain has failed to learn about what pre-election budgets should be.

"The budget we will set out in the spring will be one that will set out an economic manifesto not for a month or two but which will explicitly set out our economic proposals
for the next five years."

The chancellor said he favoured "balanced" tax cuts and added: "It's quite clear to me that the tax system, as far as it affects pensioners, needs modernisation."

He went on: "It may also be the case that we should look at what we can do for families at the time of most need, which is when their children are born."

Breaking with tradition

Mr Brown chose to break the traditional pre-budget silence of chancellors just 24 hours after a cut in American interest rates was hailed as a move to head off fears of a global economic slowdown.

He insisted in his interview that he would maintain a course of stability for the UK, avoiding a "boom and bust" approach to the economy.

"It will not be a Budget for short term quick fixes. We are going to learn from the mistakes of the 1980s and 1990s where promises made by parties were broken because they were made in circumstances that were purely short-term and opportunistic."

But shadow chancellor Michael Portillo blamed high levels of public spending for the fact that Mr Brown had had to rule out across-the-board tax cuts.

He said that taxes would be "far higher" at the next election than when Labour won power in 1997.

"The rapid growth in public spending implied by his plans will simply not prudently permit major tax cuts - indeed, if he continues on the path of public expenditure rising year-on-year faster than economic growth it will be required to be financed by further tax rises in the next parliament," Mr Portillo said.

"The choice at the next election will be between a Labour Party falling into the trap of boom and bust in public expenditure ... and a Conservative Party determined to build a world class, competitive economy on the basis of sustainable increases in public expenditure, low taxation and light regulation."

Liberal Democrat treasury spokesman Matthew Taylor said: "Pre-election bribes are wrong when hospital waiting lists are longer than ever, police numbers are down and secondary school sizes are at record levels.

"It is nonsense to try to outflank the Tory tax-cutting agenda when Labour will have spent a smaller share of national income on health, education and pensions than even the last Conservative government."